Goldman Sachs Faces Scrutiny Over Female Promotions
Goldman Sachs is currently under the spotlight for promoting the lowest percentage of women to managing director positions since David Solomon took the reins as CEO. This has raised fresh questions about the company’s commitment to diversity, particularly in light of past promises to elevate women into senior roles.
According to figures released on Thursday, women constitute just 27% of the new managing director cohort.
While Goldman acknowledged the underrepresentation, they also noted that the total number of managing directors from diverse backgrounds either remained stable or saw an increase.
This recent decline marks a departure from a steady rise that had been occurring since 2017, when women accounted for 24% of promotions, and it’s also a drop from the 31% recorded in the previous promotion cycle in 2023.
These statistics were first covered by Bloomberg News, highlighting the significant change in dynamics.
This year’s class of new managing directors is the largest since 2021, comprising 638 executives, 172 of whom are women.
The reduction in the percentage of female managing directors comes as the firm grapples with the exit of several high-profile women and ongoing criticism regarding the predominance of male leadership.
A report from March 2024 indicated that about two-thirds of women partners at Goldman when Solomon became CEO in 2018 have either left or shifted roles, while less than half of their male counterparts have done the same.
This prompted the company to launch a 12-point “briefing toolkit” aimed at managers, acknowledging that progress toward equality has been slow.
Russell Horwitz, the bank’s chief of staff, indicated in a memo that while there have been gradual improvements in female representation among vice presidents and managing directors, more needs to be done regarding their promotion and retention.
Solomon had previously vowed in a 2019 congressional testimony to prioritize inclusion as a core aspect of his leadership.
However, in February, Goldman reverted a prior policy aimed at driving corporate diversity, a rule that once enjoyed Solomon’s endorsement as a significant step forward.
This year’s promotions coincided with strategic changes that resulted in reduced female representation on the bank’s elite management committee, with women making up only 22%, down from 25% earlier in 2023.
Of the roughly dozen new appointments within Goldman’s investment banking division, merely one was a woman.
Solomon recently expressed that while the company has made progress, it remains insufficient. He mentioned this at a talk with the Economic Club of Washington.
Several senior female executives have departed in recent times, including former partners Stephanie Cohen, Beth Hammack, and Alison Mass, contributing to a dwindling number of women in the upper echelons of the firm.
Cohen, once seen as a contender for a department head position, will take leave in 2023 with no plans to return after overseeing a struggling consumer division. Hammack, a veteran trader of 20 years, was also in the running for chief financial officer but plans to retire in 2024. Meanwhile, Mas has stepped back from the management committee but continues to chair the investment bank.
The exodus has left very few women in Goldman’s most lucrative positions, and the firm also faces allegations of systemic bias.
In 2023, Goldman agreed to a $215 million settlement concerning a long-standing class-action lawsuit from over 2,800 women accusing the firm of discrimination in pay and promotions, which the company has denied.
